No Sanctions for Failure to Preserve Disaster Recovery Back-up Tapes where Other Preservation Efforts were Reasonable “In the Context of This Case”

Gaalla v. Citizens Med. Ctr., No. V-10-14, 2011 WL 2115670 (S.D. Tex. May 27, 2011)

Plaintiffs moved for sanctions based on defendant’s failure to preserve its disaster recovery back-up tapes, which were overwritten every seven or fourteen days, even after the filing of this lawsuit.  Further, “as the briefing developed,” plaintiffs “appeared to contend” that even absent a duty to preserve the disaster recovery back-up tapes themselves, “[defendant]’s failure to preserve the back-up tapes in conjunction with the failure to take timely ‘snapshots’… of relevant email accounts, and evidence that certain CMC employees had deleted emails from their account at some point in the past warrant[ed] severe sanctions.” 

Relying on Zubulake v. UBS Warburg LLC, 220 F.R.D. 212 (S.D.N.Y. 2003), the court articulated the oft-cited premise that “a ‘litigation hold does not apply to inaccessible backup tapes (e.g. those typically maintained solely for the purpose of disaster recovery), which may continued to be recycled on the schedule set forth in the company’s policy.”  The court also articulated the exception to this “general rule”:  “If a company can identify where particular employee documents are stored on backup tapes, then the tapes storing the documents of ‘key players’ to the existing or threatened litigation should be preserved if the information contained on those tapes is not otherwise available.”  In the present case, the court found plaintiffs had not demonstrated that the exception was applicable.  Moreover, the court determined that even if a duty to preserve existed and had been breached, no sanctions were warranted absent evidence that defendant acted in bad faith.

The court went on to note that at the outset of litigation defendant issued a litigation hold and in fact took several snapshots of certain employees’ email accounts.  Moreover, the “first of the month” backups of defendant’s email system from November 2009 – November 2010 were available and capable of being searched.  Reasoning that the parties had not discussed the preservation of back-up tapes until the present motion and citing the well-known opinion, Rimkus Consulting Group, Inc. v. Cammarata, 688 F. Supp. 2d 598 (S.D. Tex. 2010), for the proposition that acceptable preservation efforts turned on reasonableness and proportionality, the court found that defendant took reasonable steps to preserve “in the context of this case.”  The court dismissed with one sentence the “speculation” that employees had deleted relevant emails.

Having denied the motion for sanctions, the court nonetheless ordered that additional discovery efforts be undertaken, including that the email accounts of designated persons be retained through a “journaling” process; that the “disaster recovery first of the month” email files be preserved in their current state and that plaintiffs’ expert be allowed to search them; that the parties agree on a preservation order; and that the additional searches ordered be paid for by defendant.

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